Shopping for a Nobel

The best way for third world villagers to tap "the vast pipeline of wealth from the developed world" is to sell their products to the world's largest retailer, Wal-Mart, says Michael Strong, the head of Flow, a non-profit group promoting entrepreneurship abroad.

In a recent article, Strong challenged anyone to name an organisation that is doing more to alleviate third world poverty than Wal-Mart. So far he's gotten a lot of angry responses from Wal-Mart's critics, but nobody has come up with a convincing nomination for a more effective antipoverty organisation. And certainly none that saves money for Americans at the same time it's helping foreigners.

Making toys or shoes for Wal-Mart in a Chinese or Latin American factory may sound like hell to American college students – and some factories should treat their workers much better, as Strong readily concedes. But there are good reasons that villagers will move hundreds of miles for a job, says Strong:

  • Most "sweatshop" jobs – even ones paying just $2 per day – provide enough to lift a worker above the poverty level, and often far above it, according to a study of 10 Asian and Latin American countries by Benjamin Powell and David Skarbek.

  • In Honduras, the economists note, the average apparel worker makes $13 a day, while nearly half the population makes less than $2 a day.

    Some villagers prefer to keep farming or to run small local businesses, and they're lucky to get loans from the Grameen Bank – winner of this year's Nobel prize – and its many emulators. But other villagers would prefer to make more money by working in a factory. If you want to help them, says Strong, then "act locally, think globally: shop Wal-Mart."

    Source: John Tierney, Shopping for a Nobel, New York Times, October 17, 2006; based upon: Michael Strong, Forget the World Bank, Try Wal-Mart, August 22, 2006.

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    FMF Policy Bulletin/ 24 October 2006
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